In remarks today to the Brookings Institution, FCC Chairman Reed Hundt, responding
to what he called AT&T's invitation to discuss publicly a hypothetical AT&T-RBOC merger,
said that such a merger was "unthinkable" under antitrust laws.

Hundt noted that public debate of such mergers is important because, "We are at a
watershed point in the evolution of the telecommunications industry. Whether we have
competitive or monopolized markets depends on the interactive and complex decisions of
private firms, investors, Congress, agencies and courts. At stake is the possibility of billions
of dollars of economic growth and astounding feats of innovation only achievable through
competition."

Hundt stated that, "Combining the long distance market share of AT&T in any RBOC
region (even as it may be reduced by RBOC entry) with the long distance market share that
reasonably can be imputed to the RBOC yields a resulting concentration that is unthinkable."

Hundt, who spent 20 years as an antitrust lawyer before coming to the Commission,
continued that "[If we impute] to AT&T even a modest percentage of [local] market share
taken form the existing Bell incumbent in that Bell's region, as we must do under our potential
or precluded competitor doctrine, then under conventional and serviceable antitrust analysis, a
merger between it and the Bell incumbent is unthinkable."

Commenting on a hypothetical AT&T-RBOC combination out-of-region, he went on to
state that, "there could be risky "spillover" effects of such an out-of-region combination.
Could the RBOC and AT&T management teams reasonably be expected to collaborate and
share their best-developed business secrets and strategies out of the RBOC region even while
using those same tactics and strategies against each other in the RBOC region? Could the
RBOC join AT&T in pressing for its legal rights as an entrant out-of-region to be upheld at the
FCC or in court, while arguing in the same forums against AT&T when the dispute concerned
an in-region issue?"

Hundt also noted that, "Contemplating, discussing, negotiating and proposing
unthinkable mergers can have negative impacts on competition. During the period of
negotiation and subsequent regulatory scrutiny and likely court challenge, local competition
plans and actions can be seriously slowed down."

Quoting Teddy Roosevelt, Hundt concluded, "The true function of the state .... should
be to make the chances of competition more even, not to abolish them."